Technology and carbon mitigation in developing countries: Are cleaner coal technologies a viable option? Background paper for Human Development Report 2007

This background paper for the 2007 Human Development Report is part of the cluster: Living within a carbon budget – the agenda for mitigation. It focuses on the development and adoption of cleaner coal technologies that can reduce the environmental impact of coal use. Of particular importance in the context of climate change are those technologies that can potentially reduce emissions of CO2 from the combustion of coal. The paper draws on international experience of these technologies and focuses in particular on three industrialising countries that are heavily dependent on coal - China, India and South Africa. Coal is likely to continue to be important for these countries for decades to come. If the growth of their economies is to be compatible with climate stabilization, there is a clear need for cleaner coal technologies. The transfer of low carbon technologies – including some cleaner coal technologies - could play a pivotal role in creating incentives for developing countries such as China and India to enter a post-2012 Kyoto agreement. However, current multilateral provisions for international technology transfer are relatively weak, with a focus on project-based approaches under the Clean Development Mechanism. At the same time, the development, diffusion and financing of new technologies in energy-intensive sectors is more complex than is sometimes assumed by proponents of technology transfer. This paper explores these complexities and provides some possible ways forward to help accelerate cleaner coal technology transfer and deployment. The paper comprises six main sections. Section 1 of the paper starts with an overview of low carbon technology transfer including key issues and barriers. Section 2 provides an overview of technology transfer activities and mechanisms within the UN Framework Convention on Climate Change. Section 3 discusses the rationale for investing in cleaner coal technologies as an important part of global efforts to mitigate carbon emissions. It also provides a definition of cleaner coal technologies, and shows the extent to which the various technologies under this heading can reduce carbon emissions. This is then followed by section 4 which provides a more detailed overview of these technologies and assesses their current status. Section 5 discusses the experience of cleaner coal technology deployment in three industrialising countries: China, India and South Africa. Within each country case study, future projections of coal use in the electricity sector are used to illustrate the potential impact of cleaner coal technology deployment on carbon emissions. Finally, section 6 of the paper draws some lessons from the case study and provides some considerations for the design of policies to accelerate the deployment of these technologies.